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The Business Climate in Bulgaria has Improved in April

Sofia, Bulgaria -

In April the business enviornment of Bulgaria has improved as a result of high expectations of entrepreneurs for the sales in the coming months in all sectors checked by the National Statistical Institute - industry, construction, retail, services. The overall indicator growing by 2.8 points.

Industry and trade

The business climate indicator in the industry is also up, but moderately - by 0.7 percentage points from its March level. But the reason is not the current state of the companies, but the orders from abroad and the sales expectations in the next six months. The precarious economic environment and labour shortages remain the main obstacles to business activity, with a small increase in the number of managers reporting an the precarious economic environment as a factor.

Companies in commerce also do not appreciate their current financial position, particularly positive over a month earlier, but look to the summer with expectations for more orders and higher sales. A problem for every second manager is the demand of the market and the competition in the industry.

The amount of surplus capacity available has increased, with industry reporting being at 73.7% capacity, 3.1 points below the level seen in January.

Construction and services

While in March there was a decline in services, it is now recovering with a strong 7.1 point growth, primarily caused by the current financial positions of the companies and good sales expectations for the following months. Additionally the tourist season in Bulgaria is due to start which tends to be very good for business.

However, some companies are fearing the level of competition in their industry - 44% according to Capital.bg think that the level of competition is hindering their activities. Despite this the percentage of managers not facing difficulties has increased from 10.9% to 19.1%.

The number of construction orders has continued to grow, which increases the business situation of companies in the sector, and is causing the entire sector to grow. Managers expect this to continue over the next six months and the business climate index for construction has risen by 5.1 points in April. Managers are still however struggling to find a sufficiently qualified workforce.

Managers in services are currently not forseeing any changes in sales prices in the coming 6 months.